Fitch raises its forecasts for global economic growth in 2024

Written By Mark

Fitch raised its global economic growth forecast from 2.4% to 2.6% in 2024, supported by improving confidence in the European recovery prospects, a recovery in China’s export sector and domestic demand in emerging markets showing stronger momentum.
In its latest World Economic Outlook report, the agency expects global GDP growth to 2.6% from 2.4% expected in March. This represents a sharply upward revision to the growth rate of emerging markets (excluding China) at 3.7%, an increase of 0.5 percentage points.
The report published on the agency’s official website stated that the economic growth rate in the euro area during the year 2024 was adjusted to 0.8% from 0.6%, as well as an increase in China’s expected growth rate this year to 4.8% from 4.5% previously, while growth expectations in the United States did not change at 2.1%. Fitch indicated that for the year 2025, the agency expects the growth rate of the global economy to decline to 2.4%, with growth in America slowing to 1.5%, growth in the Eurozone accelerating to 1.5%, and growth in China will also decline to 4.5%. % next year, with exports and government spending slowing.
The agency kept most of its forecasts for oil and gas prices unchanged, which reflects market fundamentals that have not changed on a large scale, while it stated that the “OPEC Plus” coalition’s plans to cancel production cuts next year, in addition to the near-record oil production in the United States and the rise in global crude inventories, will push… The market will record a surplus in oil next year.
In a related context, the World Bank expects global economic growth to stabilize at 2.6% in 2024 before rising to 2.7% on average in the period 2025-2026, which is much lower than the average of 3.1% in the decade prior to the outbreak of the Corona pandemic.
Projections indicate that over the period 2024-2026, countries that together account for more than 80% of the world’s population and global GDP will continue to grow at a slower pace than in the decade before the pandemic.
While the World Bank expected the economy of the Middle East and North Africa region to grow by 2.8% in 2024 and 4.2% in 2025, due to the gradual increase in oil production and improved activity since the last quarter of 2024.
Expectations for 2024 are lower compared to what was expected in January, and this reflects the impact of extending oil production cuts on the ongoing conflict in the region, according to what the bank stated in its latest issue of the Global Economic Prospects report. The growth rate in the Gulf Cooperation Council countries is expected to rise to reach 2.8% in 2024 and 4.7% in 2025.
In Saudi Arabia, non-oil activities are expected to support growth rates in 2024, and the gradual resumption of oil activity is expected to lead to increased growth in 2025, according to the report.
Among non-GCC oil exporting countries, the expected recovery in the oil sector in 2025 will help boost growth in Algeria and Iraq.